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Friday 15 September 2017

Why the dollar will rise? (1)

Is the weakness of the dollar for the Fed a problem? Under given conditions, the weaker currency should initiate inflationary pressure as foreign goods become more expensive in local markets. In practice, local currency can no longer buy so many foreign goods.
The question is - is the dollar weaker, or the other currencies become stronger?
Currency analyzes are always "slippery" due to the fact that there are two sides to the equation. The dollar is weaker than the euro, but the question is which of the two sides would prevail - whether the weakness of the dollar or the strength of the euro?
A simpler way to answer this question we'll find looking at a basket of other currencies.

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